How the election result affects Brexit

Brussels had hoped that a strengthened Theresa May would be able to make the awkward compromises needed to reach a Brexit deal. But the results of the UK election caused consternation across the European Union on Friday.

Brexit talks are due to begin on June 19 but this start date could now slip. “Brexit negotiations should start when UK is ready; timetable and EU positions are clear,” Michel Barnier, Europe’s chief Brexit negotiator, wrote on Twitter. “Let’s put our minds together on striking a deal.”

Britain’s political turmoil is unlikely to change the underlying policy positions of the EU, but with the result ending in a UK hung parliament officials in Brussels will not know who they will be negotiating with, when they will be ready, or if the policy outlook will match that mapped out by Mrs May before the election.

“We’re not dancing and celebrating the uncertainty,” said an official involved in preparations on the EU side. “It will make things more complicated, and it was complicated enough.”

In practical terms the EU will be open to giving Westminster time to form a government, be it for a few weeks or a couple of months. But should there be deadlock in Westminster, there is extremely unlikely to be any willingness to extend deadlines.

However, senior diplomats were also suggesting that the hung parliament could result in London stepping back from the “hard Brexit” stance taken by Mrs May when she said the UK would leave Europe’s single market and customs union.

“If this goes anywhere, it has to be towards a Brexit closer to the EU,” said one. “An incoming prime minister would surely have the wiggle room to revisit the decisions to exit the single market and customs union.”

The two-year deadline of Article 50 — March 29 2019 — is likely to hold for the time being. France and Germany are loath to let the Brexit saga drag on past the European elections in 2019. Impatience with London was growing after a campaign marked by some tough anti-EU rhetoric. “The mood is to cut them loose,” said one senior EU diplomat.

On policy, the EU side may need to adjust to a different angle of engagement with the Brits, once they are ready.

All preparations by Mr Barnier were based on the UK holding to an approach that leaves the single market, customs union and takes control of immigration.

There was also a view in the EU that a strong Mrs May would be able to strike deals in Brussels and then sell them to a hostile media in Britain and to the hardliners in her own party.

Martin Selmayr, chief of staff to European Commission president Jean-Claude Juncker, told Politico last month: “We need a very strong negotiator who unites her entire nation behind her. I am convinced the Brits, pragmatic as they are, will enter negotiations in good faith.”

Mrs May’s weak election performance has thrown Brexit into confusion, including whether the prime minister’s restive party, demoralised by a poor election campaign, will even allow her to lead the country into the negotiations.

Even if the prime minister survives, she will be more vulnerable to pressure from what David Cameron — her predecessor — called the “extremes” in her party, including from some Eurosceptics who would prefer Mrs May to walk away without a deal at all.

Some Tory ministers were privately speculating there might have to be a second British election this year, creating a vacuum just as Brexit negotiations were about to start.

If such a poll took place, the opposition Labour party might fight the contest promising to oversee a “softer” Brexit, including possibly staying within the single market, possibly making common cause with the pro-European Liberal Democrats.

Should Britain’s next government rethink the exit from the customs union, this could be accommodated relatively easily in the negotiation plans laid out by the commission.

More worrying for the union would be the albeit slim possibility of a British prime minister asking to stay in the single market, with some special arrangements made to curb free movement. That would test fundamental principles of the union, raising the danger of division between the 27.

For the most part, though, at this early stage EU diplomats see the result as shifting the odds more towards a softer Brexit, rather than increasing the likelihood of an unmanaged, hard exit without a withdrawal agreement. “This only goes one way for me,” said one EU diplomat from a northern member state. “They can’t get much harder than where they started from.”

Northern Ireland is another top concern. The EU would see some political risk for Brexit should the Democratic Unionist party play an important role in any coalition or minority government.

Giving Northern Ireland’s leading Unionist party a deciding say on government policy could tie the hands of Britain’s negotiator on sensitive issues over the border, as well as further raising political tensions with Republicans.

Work will start on Friday in Brussels on how to handle a protracted political crisis in Westminster with no stable government. One option would be to begin technical talks at official level. But the EU side see little point in that, given the first big sticking points will be political.